Technology

Alibaba`s Gross Merchandise Value to Hit $1.2T by 2025, 55% More than Amazon

Published

4 years ago

March 24, 2021

While many Chinese companies have faced severe challenges and losses caused by the COVID-19 pandemic, Alibaba Group emerged as one of the country’s biggest corporate winners in times of crisis.

The multinational tech giant expanded its business significantly in 2020, as demand for its services and online marketplace surged amid the lockdown.

According to data presented by Aksje, Alibaba’s gross merchandise value is expected to continue growing in the following years and hit $1.2 trillion by 2025, 55% more than its biggest competitor Amazon.

Alibaba Group’s Revenue Jumped by 35% Amid Pandemic, eCommerce Platforms Hit 780M Users

Alibaba Group emerged as China’s leading eCommerce company after the 2003 SARS outbreak. Since then, it has become a significant hirer and a lender, providing more than 100,000 jobs and offering billions of dollars in loans to SMEs.

One of the group’s most profitable marketplaces is Taobao, responsible for more than 80% of its sales. Unlike Amazon, Alibaba isn’t involved in direct sales and doesn’t own warehouses; it simply helps branded manufacturers and small businesses to reach consumers.

Statistics show that revenues of the Chinese e-commerce corporation surged in recent years. In 2015, Alibaba Group generated $11.7bn in revenue, revealed the company’s earnings reports. This figure soared by 390% to $57.9bn in 2019 and continued rising.

In the fiscal year ending March 31, 2020, Alibaba reported around $72bn in revenue, a 35% increase in a year. Almost 70% of that value was generated through the domestic commerce retail business.

The company`s earnings report also revealed that last year gross merchandise volume jumped by 15% YoY and hit over $1 trillion for the first time. Taobao sales generated almost 50% of that value. On Singles Day 2020 only, online shoppers placed more than 2.3 billion orders on Alibaba’s Tmall and Taobao eCommerce platforms, surpassing US Cyber Monday sales.

The impressive growth of sales and revenues was fuelled by a surge in online shopping in Alibaba’s home market China. Due to less developed physical stores and cheap logistic services, the e-commerce market has grown rapidly in third-and-lower tier cities in recent years. Cross-border online shopping is also becoming a trend, as people are becoming more aware of international brands. Today, China has the largest number of online shoppers globally, almost 783 million in 2020.

The vast majority of them are using one of Alibaba’s eCommerce platforms. Statistics indicate the number of annual active consumers on Alibaba’s online shopping properties in China hit 779 million in December last year, up from 711 million in 2019.

Amazon’s Gross Merchandise Volume to Hit $795B by 2025

The surge in online sales amid pandemic also fuelled Amazon’s sales and revenue growth. The Future Shopper Report 2020 conducted and published by Wunderman Thompson Commerce showed 48% of global online shoppers choose Amazon as their preferred shopping destination for entertainment items.

Additionally, 37% of respondents preferred Amazon as their first shopping destination to buy toys and 29% for tech purchases.

In 2020, sellers on the Amazon marketplace sold $300bn worth of goods, $100bn more than in 2019. The total gross merchandise volume, including sales by Amazon itself and by the marketplace, hit almost $490bn.

Net revenue of the world’s second-largest eCommerce company jumped by 38% year-over-year and hit $386bn in 2020. Retail revenues accounted for 76% of that value.

Amazon`s 2020 annual report showed online stores generated almost $198bn in revenue last year, up from $141.2bn in 2019. Third-party seller revenues also spiked amid the pandemic reaching $80.5bn in 2020, almost a 50% increase in a year. Only psychical store revenues slipped to $16.2bn, compared to $17.2bn in 2019.

The Edge by Ascential projections for 2025 show Amazon’s gross merchandise volume is set to continue growing in the following years and jump to $795bn, $405bn less than the leading Alibaba Group. Walmart would rank third, with $644bn gross merchandise value.

Pinduoduo and JD.com are forecast to hit $611bn and $462bn in GMV by 2025 and rank fourth and fifth on this list.

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Technology

OpenAI’s Valuation Soars to $157 Billion After $6.6 Billion Funding Round

Published

15 hours ago

October 3, 2024

Samed Olukoya

OpenAI, the company that owns Chatgpt, has raised $6.6 billion in a new funding round to boost the company’s valuation to $157 billion as it looks to strengthen its lead in generative AI technology.

Thrive Capital led the funding round with $1.3 billion, while Microsoft invested an additional $750 million, bringing its total investment in OpenAI to $13.75 billion.

According to a source familiar with the matter, Khosla Ventures, Fidelity Management & Research Co., and Nvidia Corp., the chipmaker whose powerful processors are driving the AI boom—were also among the investors.

Apart from Elon Musk’s SpaceX and TikTok owner ByteDance Ltd, this deal ranks as one of the largest-ever private investments.

The ability of OpenAI to raise such a substantial amount despite heightened global risks demonstrates the industry’s confidence in the power of AI.

Other investors included Tiger Global Management, which contributed $350 million, and Altimeter Capital, which invested at least $250 million.

SoftBank Group Corp. and the new Abu Dhabi-based tech investment firm MGX also participated, with SoftBank’s investment totaling $500 million, according to one source who requested anonymity. Venture firm Coatue was another participant.

In a statement, the company said it plans to use the funds to advance AI research and expand its computing capacity. “AI is already personalizing learning, accelerating healthcare breakthroughs, and driving productivity,” said OpenAI Chief Financial Officer Sarah Friar. “And this is just the start.”

Fintech

Kazang Pay Launches Card Acquiring Service in Zambia

Published

2 days ago

October 2, 2024

Samed Olukoya

Kazang, the prepaid value-added services (VAS) and card acquiring business within JSE-listed fintech Lesaka Technologies, has launched its Kazang Pay card acceptance solution for merchants in Zambia. Kazang Pay makes it affordable for merchants to accept card payments on the same Kazang terminal they use to sell prepaid products and services.

The Kazang Pay enabled terminal in Zambia accepts VISA debit and credit cards as well as mobile wallet payments. Payments are settled to the merchant’s Kazang wallet on the same day. It’s as easy as letting the customer tap or insert their bank card and enter their PIN on the secure scramble PIN pad.

Kazang operates around 12,000 VAS terminals in Zambia. The goal is to enable the majority to accept card payments over the next six months. Benefits to merchants include low transaction fees and no monthly terminal rental fee for those that meet a modest monthly transaction threshold as well as the opportunity to grow their business through card acceptance.

Kazang is Zambia’s largest VAS point-of-sale terminal provider, enabling mobile money payments, bank and mobile money cash in and out, bill payments, airtime, Zesco, and many other prepaid services on one platform. The addition of card acceptance makes the platform even more comprehensive for merchants and consumers alike.

The launch of Kazang Pay in Zambia follows the introduction of the solution in South Africa, where around 60,000 small and micro merchants use Kazang Pay to accept card payments. In Zambia, there are around 3.8 million debit, credit and ATM cards in issue and 41,000 point of sale (POS) terminals in place. The value of POS transactions has grown to K 111.4 billion by 2022 from less than K 20 billion in 2018, according to the Bank of Zambia.

Says Leon de Wit, managing director at Kazang Zambia: “Zambia has made enormous strides in terms of financial inclusion, with card usage and penetration growing at a rapid pace. With Kazang Pay, merchants can now easily accept card payments on the same all-in-one terminal they already use for vending of VAS products.

“Card transactions help merchants to grow basket sizes and potentially attract more customers, and at the same time, reduce the risks and costs of handling cash. Moving towards digitalised payments will also enable merchants to track sales, manage cash flow, and create a footprint that could make it easier for them to access loans.”

Ashley Naidoo, director of Kazang Pay in South Africa says: “Our Zambian merchants have eagerly embraced our card acquiring service as a valuable part of our one-stop solution. Following the launch of Kazang Pay in Zambia, we have seen higher VAS sales across our merchant base and much-improved merchant retention and with our card acquiring solution we now appeal to a broader merchant base.”

Technology

Nigerians Outraged as Starlink Hikes Subscription Fees by 97% Amid Inflation

Published

2 days ago

October 1, 2024

Ugwoke Ogbodo

Nigerians have expressed disgust over the decision by Elon Musk’s internet service company, Starlink, to increase its monthly subscription for its service in Nigeria by 97%.

The company, while blaming worsening inflation in the country for the rate hike, disclosed that its N38,000 package has now become N75,000.

For new users, the company also increased the price of the Starlink kits (hardware) by 34%, from N440,000 to N590,000.

While Starlink has previously reviewed the price of its hardware in Nigeria both upwards and downwards several times, this is the second time it has increased subscriptions.

In a message to its customers in Nigeria, the company stated that old customers would start paying the increased price by October 31, while new customers would pay the new price immediately.

The company’s message to its customers, as posted on its website, read, “Due to excessive levels of inflation, the Starlink monthly service price will increase from current rates to the respective rates below: Standard (Residential): N75,000; Mobile-Regional (Roam Unlimited): N167,000; Mobile – Global (Global Roam): N717,000.

“As a current customer, your monthly service price will increase in 1 month, beginning on 31 October 2024. For new customers, the price increase is effective immediately.

“If you do not wish to continue your service, you can cancel at any time.”

Starlink is Gaining Traction in Nigeria

Despite its higher costs compared with local ISPs, Starlink, which announced its presence in Nigeria in January 2023, has sparked high interest among Nigerians eager to change their service providers.

The ubiquitous nature of its satellite service also encourages people in areas with poor internet networks to choose Starlink.

Notwithstanding its acceptability, some of its customers have expressed outrage over the price hike, saying it is excessive.

One of those who reacted, Adedayo Abisoye Idowu, said, “The rich just want to continue increasing their wealth by collecting the little from the poor always.”

For Anachuja Philano, the Nigerian government should fix the economy to prevent inflation that forces companies to raise the prices of goods and services.

Philano wrote, “Let the clueless Nigerian government fix their depleted economy. You can’t have an economy that is in shambles and expect prices of goods and services to be low.”